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Split U-46 vote accepts prevailing wage rates


By Seth Hancock
  The Board of Education in School District U-46 voted 5-2 on a resolution establishing the prevailing wage rates for the upcoming year at its meeting on Monday, June 18.
  Board members Phil Costello and Jeanette Ward were the no votes, both of whom have opposed the resolution in the past. Both have argued that the lack of competition created by the prevailing wage lead to higher costs for the taxpayers.
  “The Illinois Prevailing Wage Act is an outdated law which is harmful to local governments, the taxpayers they represent and the children of this district,” Ward said. “Furthermore, I don’t believe that the current prevailing wage rates that we’ve received from the Illinois Department of Labor (IDL) are in line with the actual rates of contractors within this district.”
  Jeff King, chief operating officer, did say that U-46 uses the IDL numbers. Those numbers are driven by unions rather than market forces, and prevailing wages act as a minimum wage for outside contractors doing work for a local government body.
  Ward advocated that U-46 do its own survey of local contractors to establish its own prevailing wages which would take market-driven wages into account.
  A Government Accountability Office report has found that prevailing wage laws lead to “a lack of transparency in the survey process” and benefit entrenched contractors and unions to force out competition. Studies, including one by Suffolk University’s Beacon Hill Institute, have found hefty increases in construction costs for public bodies due to prevailing wages laws.
  The Suffolk University study found that prevailing wage laws bump wages 22 percent higher than market wages. The 2015 Operational Employment Statistics from the Bureau of Labor Statistics showed even higher costs in Illinois at 37 percent while the Chicago-Naperville-Elgin/Cook category were 39.7 percent higher.
  “The current rates from the Illinois Department of Labor are heavily influenced by the rates of union contractors,” Ward said. “This creates a lack of competition within the marketplace essentially cutting out local small businesses and minority contractors from being able to bid on a public works project.”
  Ward added: “Prevailing wage laws increase the cost of public construction jobs by about 20 percent. U-46 could use that money in classrooms, and it would be significant. In an uncertain financial climate, this is a savings we should pursue. In summary, wages driven by unions instead of by market forces means the taxpayers are left with a bigger bill to pay.”
  The prevailing wage laws in Illinois were established in 1941 which is 10 years after the federal prevailing wage law, known as the Davis-Bacon Act, was enacted. As of June of this year, the U.S. Department of Labor reported that 23 states do not have any prevailing wage laws, eight of which have never had such laws while 15 others have repealed their prevailing wage laws.
  A briefing paper by David E. Bernstein of the Cato Institute, a public policy think tank, titled “The Davis-Bacon Act: Let’s Bring Jim Crow to an End” argued a similar case as Ward’s regarding prevailing wage laws preventing “minority contractors” from receiving government work.
  Bernstein wrote the federal law was “designed explicitly to keep black construction workers from working on Depression-era public works projects” and prevailing wage laws in general continue to perpetuate “discriminatory effects today by favoring disproportionately white, skilled and unionized construction workers over disproportionately black, unskilled and non-unionized construction workers.”
  Supporters of the original Davis-Bacon Act said the intent of such laws was to keep minority contractors from getting work including Rep. Clayton Allgood who in a floor speech criticized “cheap colored labor” for being in “competition with white labor throughout the country.”

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